Federal Deposit Insurance Corporation
550 17th Street NW, Washington, DC 20429 Division of Supervision
Deposit Shifting
FIL-76-97
July 29, 1997
TO: CHIEF EXECUTIVE OFFICER
SUBJECT: Withdrawal of Proposed Rule on Deposit Shifting
The FDIC Board of Directors on July 22, 1997, withdrew the proposed rule on deposit shifting
that the FDIC issued in February of this year. Attached is a copy of the Federal Register notice
withdrawing the proposed rule.
The proposed rule was intended as a means to implement the deposit-shifting statute, a
provision of the Deposit Insurance Funds Act of 1996. The statute requires the FDIC, the Office
of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System and
the Office of Thrift Supervision to take appropriate actions to prevent insured depository
institutions and their holding companies from facilitating or encouraging the shifting of SAIF-
assessable deposits to BIF-assessable deposits to evade assessments imposed on SAIF-
assessable deposits. The deposit-shifting statute permits, but does not require, the FDIC to
issue implementing regulations.
The Board decided to withdraw the proposed rule because of:
the diminished rate differential between the assessments paid on BIF-assessable
deposits and the assessments paid on SAIF-assessable deposits,
the lack of evidence of any significant, widespread deposit shifting among depository
institutions,
the regulatory burden that might result from the issuance of a regulation on deposit
shifting; and
the ability of the FDIC and the other federal banking agencies to monitor and enforce the
statute on a case-by-case basis.
The Board's decision to withdraw the proposal was consistent with the views of the majority of
those who commented on the proposed rule.
The Board noted that the FDIC will monitor the effectiveness of the case-by-case approach to
implementing the deposit-shifting statute and, if necessary, reconsider in the future whether a
regulation is needed.
For further information, please contact Joseph A. DiNuzzo, Counsel in the Legal Division, at
(202) 898-7349.Inactive
550 17th Street NW, Washington, DC 20429 Division of Supervision
Deposit Shifting
FIL-76-97
July 29, 1997
TO: CHIEF EXECUTIVE OFFICER
SUBJECT: Withdrawal of Proposed Rule on Deposit Shifting
The FDIC Board of Directors on July 22, 1997, withdrew the proposed rule on deposit shifting
that the FDIC issued in February of this year. Attached is a copy of the Federal Register notice
withdrawing the proposed rule.
The proposed rule was intended as a means to implement the deposit-shifting statute, a
provision of the Deposit Insurance Funds Act of 1996. The statute requires the FDIC, the Office
of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System and
the Office of Thrift Supervision to take appropriate actions to prevent insured depository
institutions and their holding companies from facilitating or encouraging the shifting of SAIF-
assessable deposits to BIF-assessable deposits to evade assessments imposed on SAIF-
assessable deposits. The deposit-shifting statute permits, but does not require, the FDIC to
issue implementing regulations.
The Board decided to withdraw the proposed rule because of:
the diminished rate differential between the assessments paid on BIF-assessable
deposits and the assessments paid on SAIF-assessable deposits,
the lack of evidence of any significant, widespread deposit shifting among depository
institutions,
the regulatory burden that might result from the issuance of a regulation on deposit
shifting; and
the ability of the FDIC and the other federal banking agencies to monitor and enforce the
statute on a case-by-case basis.
The Board's decision to withdraw the proposal was consistent with the views of the majority of
those who commented on the proposed rule.
The Board noted that the FDIC will monitor the effectiveness of the case-by-case approach to
implementing the deposit-shifting statute and, if necessary, reconsider in the future whether a
regulation is needed.
For further information, please contact Joseph A. DiNuzzo, Counsel in the Legal Division, at
(202) 898-7349.Inactive
Nicholas J. Ketcha Jr.
Director
Attachment
Distribution: All Insured Banks and Savings Associations\
NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's
Public Information Center, 801 17th Street, N.W., Room 100, Washington, D.C. 20434 ((703)
562-2200 or 800-276-6003).Inactive
Director
Attachment
Distribution: All Insured Banks and Savings Associations\
NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's
Public Information Center, 801 17th Street, N.W., Room 100, Washington, D.C. 20434 ((703)
562-2200 or 800-276-6003).Inactive